WASHINGTON/BEIJING (Reuters) – U.S. President Donald Trump on Friday lashed back at a new round of Chinese tariffs by heaping an additional 5% duty on some $550 billion in targeted Chinese goods in the latest tit-for-tat trade war escalation by the world’s two largest economies.

Trump’s move, announced on Twitter, came hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods, prompting the president earlier in the day to demand U.S. companies move their operations out of China.

The intensifying U.S.-China trade war stoked market fears that the global economy will tip into recession, sending U.S. stocks into a tailspin, with the Nasdaq Composite .IXICdown 3%, and the S&P 500 .SPX down 2.6%.

U.S. Treasury yields also declined as investors sought safe-haven assets, and crude oil, targeted for the first time by Chinese tariffs, fell sharply.

Anyone get the feeling this could be strategy? Maybe Trump is pinching the economy right now to reduce the flow. And then next year suddenly make a deal with China and lift the trade war completely. The market would respond with joy and money will flood. And it would eliminate any possibility of recession during the election year.

@jerry611 No way. Trump doesn’t plan or strategize. He doesn’t even know what a strategy is, because he really is that stupid. He’s just doing a reality TV show in his own mind. He’s also quite mad and actually believes he’s brilliant. Even if he, or someone he listens to–if there is anyone he listens to, was trying to implement something like that, it’s a very dangerous game. For Trump.

The economy could go into recession at any time. Besides, why should the Chinese trust him after what he pulled with Iran? They don’t, and they won’t. They’ll play tit for tat, and maybe Trump will back down, but that goes against his normal pattern. The Chinese are easy to predict because they’re rational and, well, Chinese. They’ll do whatever they can to mitigate whatever damage Trump does to them, and wait for a more reasonable, not to mention sane, person to replace him. Then they’ll truly negotiate.

We know now that Government by organized money is just as dangerous as Government by organized mob.--Franklin Delano Roosevelt

@jerry611 Maybe Trump is pinching the economy right now to reduce the flow.

That “pinch” could come in the form of a piece of legislation already available that reduces import quotas. Absolute quota. SLOWLY! Whereas American manufacturers then could slowly tool up production of competitive goods.

Import quotas control the amount or volume of various commodities that can be imported into the United States during a specified period of time. Quotas are established by legislation, Presidential Proclamations or Executive Orders. Quotas are announced in specific legislation or may be provided for in the Harmonized Tariff Schedule of the United States (HTSUS).

The participants are wedded to their strategy and double down when it does not seem to be working. “It’s not that my strategy of increasing tariffs is bad, it’s just that I have not raised tariffs enough. Then they will have the desired effect.”

The is particularly true of President Double-Down, Never Admit a Mistake.

National problems (slavery/racism, income inequality, pathetic health care, weak unions) are not solved with more states' rights. Global problems (climate change, migration, trade, war) are not solved with more national sovereignty.

A CEO, an American worker and an immigrant sit at a table with a dozen cookies in front of them. The CEO grabs 11 of them, then leans over and warns the worker, "Watch out for the immigrant. He is trying to get your cookie."